Yang Mi Announced The Termination Of The Contract. Is Versace's Road To China Easy To Go?

At the time of force China, Italy luxury Versace (Versace) was pushed onto the cusp.

Recently, some netizens were exposed on the Internet. Versace's T-shirt listed Hongkong and Macao as the state. After triggering the anger of netizens, Versace issued an apology in the early morning of August 11th in the official micro-blog, saying that the related products had been put under all channels in July 24th. However, the apology statement is only "micro-blog's special offer". As of press release, the reporters did not find any apology statements on Versace's foreign social media.

Yang Mi, the Chinese actress who just became the spokesperson of Versace in June 24th, announced on August 11th that she unilaterally terminated cooperation with the brand. It is reported that Yang Mi has issued a letter of "rescission of the agreement" to the Versace brand, and has ceased all cooperation with the Versace brand.

Versace has been caught up in the crossroads and has been eaten at the crossroads.

According to public information, Versace, which was born in Italy in 1978, was founded by Italy designer Gianni Versace and brother Santo and sister Donatella. After the death of Gianni in 1997, Donatella took over Versace and served as the creative director of Versace for 21 years.

Versace is famous for its bold design and medusa logo. With the earth shaking changes in the global luxury industry, Versace has encountered some difficulties. With the continuous loss of brand in recent years, Versace finally had to face the fate of being bought.

Versace was acquired by Capri, a luxury group, last year. In December 31, 2018, Michael Kors issued a statement on the official website saying that it had completed the acquisition of Italy's luxury brand Versace and would officially rename it as Capri group in January 2, 2019. At present, Capri group includes Michael Kors, high-end footwear brand Jimmy Choo and Versace.

Capri group said in a statement that the acquisition of Versace is an important milestone for the company. The group said that the group will spend its resources and expects that Versace's revenue will rise to $2 billion after the acquisition, while Versace's global retail business will expand from 200 to 300.

As early as September 2018, Michael Kors issued a statement announcing the signing of the final agreement on the acquisition of Versace, the purchase price of which was 1 billion 830 million euros, and the mode of payment was cash plus stocks. Cash is partly derived from the company's book cash, loans under the existing bank credit lines and credit support promised by financial advisor Morgan chase and Barclays Bank. Meanwhile, the Versace family will also get a $150 million Capri group stock.

Versace has been one of the models of independent operation. Public information shows that at present, Versace company in addition to the main line Versace, it also includes ISTANTE, VERSUS, V2, VERRY and children's wear YOUNG VERSACE and other sub line series, but the current revenue growth momentum still comes from Versace.

In February 2014, Versace announced an agreement with Blackstone, an American private equity firm. Blackstone acquired Versace 20% stake, and the company remained dominated by the Versace family, when Versace valued at 1 billion euros. At that time, the Versace family and Blackstone Group said they would carry out IPO in three to five years. However, Jonathan Akeroyd, chief executive of Versace group, recently said that the group has not yet planned to carry out IPO, and the current development focus is still on brand restructuring and performance improvement.

Compared with other luxury brands such as Gucci, Versace has performed very well in recent years. The slow investment in digital marketing and electricity providers has gradually lost market share among young shoppers in the core of luxury goods. According to data released by Versace, sales in the 2017 fiscal year increased by 4% to 686 million euros, unchanged from 2016.

It is worth noting that since 2016, Versace has been in a closed shop. In 2016, the number of Versace stores in the world was 239, and in 2017 it was 218. By the end of 2018, Versace had 200 stores in the world.

The first quarter of 2020 Versace Asian sales exceeded $70 million.

In August 7th, Capri released the first quarter of 2020 report. Data show that in the first quarter of June 29th, Capri Group sales increased 11.9% to $1 billion 346 million, less than analysts estimate of $1 billion 370 million. Versace is the only luxury brand registered by Capri group. Its sales growth in the same store reached two digits, and its sales volume was $207 million, of which sales from Asian markets including China accounted for 71 million US dollars, accounting for 34% of total revenue, and the second largest market for Versace.

Capri Group Chairman and chief executive officer John Idol said in the earnings report that the loss in the performance period was mainly related to the decrease of wholesale income and the weakness of North American business. However, it was emphasized that the result was within the group's expectations. After the introduction of the new brand, there was a running in period. Versace might take another year to achieve similar performance.

Will Versace Michael Kors group suffer from indigestion? Zhou Ting, director of the luxury goods expert and guest Research Institute, told the Beijing News reporter that this is based on how to reposition Versace, insisting on the positioning of luxury goods or becoming a light luxury route. It is the most likely to change the luxury, but also the most difficult to succeed. It is best to insist on the positioning of luxury goods and re locate the customers and products, so that the possibility of success is even greater.

According to the financial report, Capri group plans to invest more in Versace this year, including opening about 30 new stores and expanding the business of electricity providers. The long-term goal is to raise Versace's annual revenue from $900 million to $2 billion.

It is worth noting that Capri is the parent company of American light luxury brand Michael Kors. Yang Mi is the first global spokesperson for Michael Kors. According to industry analysis, Yang Mi's endorsement once made Michael Kors win the brand fever in China. Capri may be interested in making Versace copy the successful path of Michael Kors in China.